Pandemic causes changes in hotel management, indicates JLL report

Lodging Industry in Numbers 2021 found that lessons learned from the crisis will be taken by managers to the post-pandemic.

August 11, 2021

The performance of the Brazilian hotel market in 2020 reflected the crisis triggered by the COVID-19 pandemic and registered a large drop in occupancy rates. The adversity scenario motivated the sector to rethink practices and redesign management models. As they have proven to be effective, the changes promoted will be taken by the managers for the post-pandemic period, even after the resumption and recovery of the hotel industry

This is what the study “Lodging Industry in Numbers 2021” indicates, carried out by JLL based on questionnaires completed by more than 500 Brazilian hotels, resorts and flats. The conclusion of the study is that, after an excellent job of hotel administrators renegotiating with suppliers and canceling contracted services, the way to manage hotels will no longer be the same. “Controlling operating costs will be a goal pursued with much more dedication than was done historically,” says Ricardo Mader, director of Valuation and Advisory Services (VAS) at JLL.

The pandemic also highlighted the importance of brands and the greater power of hotel chains when negotiating with Online Travel Agencies (OTAs), which should intensify the increase in the option for global brand franchises in the coming years.

In 2020, the Hotel Industry in Brazil experienced its worst crisis. There was a drop of 56% in the occupancy rate and 14.5% in the average daily rate. Gross Profit Margin was negative by 3.9%. Worldwide, liquidity in the hotel sector plummeted 60% in the same year as a result of the pandemic.

With the advancement of the vaccination program and respecting the safety protocols, the projection is that the Brazilian hotel sector will start to recover in the third quarter of 2021. The recovery process should take about 1 year. “In 2023, we should observe levels similar to those reached in 2019”, says Ricardo Mader.

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